The question of whether to buy land, particularly in a large, established Jerusalem neighborhood like Pisgat Ze’ev, is a fascinating one for an investor. It’s a contrarian move. While most investors focus on buying existing apartments or new construction, buying raw land is a different game entirely, one with higher risks but potentially monumental rewards.
Understanding the Asset Class: Urban Land
Buying a plot of land (“migrash”) in an urban area like Pisgat Ze’ev is not about farming; it’s an investment in future development. The value of the land is directly tied to its zoning rights: what the municipality will allow you to build on it.
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Zoning is Everything: A plot zoned for a single-family home has a certain value. If that same plot gets rezoned to allow for a building with six apartments, its value can multiply overnight. This process, known as “hashbacha” (betterment), is the holy grail for land investors.
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Scarcity Drives Value: Jerusalem is geographically constrained. There is very little undeveloped private land left within the city’s municipal boundaries. This scarcity makes every available plot increasingly valuable over time.
The Pisgat Ze’ev Case Study
Pisgat Ze’ev is a mature, sprawling neighborhood with a large population, good infrastructure, and a light rail connection. Most of the area is already built out. Therefore, the available land for sale is likely to be one of two types:
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Infill Plots: Small, leftover plots of land where a single private home or a small building could be constructed.
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Land for Rezoning: Larger plots, currently zoned for low-density use, that an investor might buy with the long-term goal of lobbying the city to approve a larger building project.
An investment in Pisgat Ze’ev land is a bet on the neighborhood’s continued growth and densification. As Jerusalem’s population grows, the city will be forced to approve more dense construction in existing neighborhoods. An investor who buys land today is positioning themselves to be the beneficiary of that future policy shift. It’s a long-term, speculative play that requires significant capital and patience, but the potential upside is far greater than that of simply buying a finished apartment.
Too Long; Didn’t Read
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Buying land in an established neighborhood like Pisgat Ze’ev is a high-risk, high-reward investment strategy.
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The land’s value is determined by its zoning rights (what can be built on it).
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The primary investment thesis is to benefit from future rezoning (“hashbacha”) that allows for more dense construction.
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Given Jerusalem’s land scarcity, this is a long-term bet on the city’s continued growth and densification.
